Furlough - what you need to do to claim the wages grant.
The government has confirmed further details on the Coronavirus Job Retention Scheme.
Please find a summary below:
- You need to get agreement from your employees to designate them as furloughed workers and reduce their pay to 80%, capped at £2,500 per month. There is currently no requirement for employers to top-up wages to 100%.
- The employee will pay taxes in the usual way whilst on furlough.
- Employees cannot perform any work for the business whilst on furlough.
- It is unlikely that directors will be able to furlough themselves as they will still need to fulfil their obligations as directors, and are also likely to be the people implementing furlough and running the business whilst lock down is in place.
- You can designate employees as a furloughed worker if they are PAYE and were on your books on 28th February 2020
- The scheme applies to all types of employee contract including full time, part time, zero hours and variable hours
- Once people recover after being on sick leave or in self-isolation, they can be furloughed
- Anyone made redundant from 28th February 2020 can agree to be brought back and placed on furlough
- Furlough must be for a minimum three weeks, but employees can be placed on furlough more than once
- Wages must be paid to employees first and then reclaimed through an online portal which is currently being built by HMRC and it is expected that it will not be ready for claims until the end of April.
For further information please visit https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme. This also includes how earnings are calculated.